Bidding wars catching local homebuyers off-guard

Homebuyers are unexpectedly finding more competition this spring in landing their dream home. Bidding wars are increasingly being reported in markets across the country, including Seattle, The Wall Street Journal reports.

“It’s a little surprising because we thought bidding wars were done with,” Andy Aley, a Seattle home shopper told The Wall Street Journal. Aley says he was outbid on a home earlier this year, even though he offered to pay $23,000 above the listing price and also waive inspections and other closing conditions.

Homebuyers are frustrated and caught off-guard about the bidding wars re-emerging, real estate professionals report.

“We’re writing a record number of offers, but we’re not seeing a record number of closings and that’s because it’s so competitive,” Glenn Kelman, chief executive of Seattle-based Redfin Corp., told The Wall Street Journal.

Why are things getting so competitive? Many housing markets are seeing a drastic decrease in the number of homes listed for-sale, leaving homebuyers with fewer options and more bidding on the same house. Housing analysts say the shortage in supply is from sellers unwilling to take much less for their home than what they originally paid for it and pulling their homes off the market. Also, a surge in investors has made the market more competitive, as investors snatch up homes in bulk in all-cash deals.

“The bidding wars caused by tight inventory provide the latest evidence that housing demand is starting to pick up after a six-year-long slump,” The Wall Street Journal reports.